Michael Burry Warns Today's AI Debt Bubble Mirrors The Dot-Com Era

Investor Michael Burry warned that the current AI-driven financing boom resembles the late-1990s dot‑com/TMT bubble and could pose broad credit-market risks. Citing Torsten Slok’s May 18, 2026 report, Burry highlighted that 38% of high‑yield issuance, 49% of investment‑grade issuance and 87% of VC funding are now linked to AI, mirroring or exceeding TMT concentrations in 1999–2000. He cautioned that heavy AI exposure across bond markets could lead to widespread downgrades and credit stress—recalling that more than $100 billion of investment‑grade debt turned into junk after the 2000 crash—potentially pressuring risk assets and yield spreads and reducing non‑AI capital allocation. The piece signals elevated systemic risk for credit and equity markets should AI investments sour.